XML 48 R40.htm IDEA: XBRL DOCUMENT v3.23.3
Fair Value Measurements (Tables)
 3 Months Ended
Mar. 31, 2023
Fair Value Inputs, Assets, Quantitative Information

The following table presents the Companies' quantitative information about Level 3 fair value measurements at March 31, 2023. The range and weighted average are presented in dollars for market price inputs and percentages for price volatility.

 

 

 

 

 

Dominion Energy

 

Virginia Power

 

Valuation
Techniques

Unobservable
Input

 

Fair Value (millions)

 

Range

Weighted
Average(1)

 

Fair Value (millions)

 

Range

Weighted
Average(1)

Assets

 

 

 

 

 

 

 

 

 

 

 

 

Physical and financial forwards:

 

 

 

 

 

 

 

 

 

 

 

Natural gas(2)

Discounted
   cash flow

Market price
   (per Dth)

(3)

$

6

 

(2)-5

—

 

$

6

 

(2)-3

—

FTRs

Discounted
   cash flow

Market price
   (per MWh)

(3)

 

37

 

1-7

4

 

 

37

 

1-7

4

Electricity

Discounted
   cash flow

Market price
   (per MWh)

(3)

 

152

 

18-110

48

 

 

—

 

—

—

Physical options:

 

 

 

 

 

 

 

 

 

 

 

Natural gas(2)

Option model

Market price
   (per Dth)

(3)

 

16

 

1-10

4

 

 

16

 

1-10

4

 

Price volatility

(4)

 

 

23%-74%

53%

 

 

 

23%-74%

53%

Total assets

 

 

 

$

211

 

 

 

 

$

59

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Physical and financial forwards:

 

 

 

 

 

 

 

 

 

 

 

Natural gas(2)

Discounted
   cash flow

Market price
   (per Dth)

(3)

$

3

 

(2)-3

(1)

 

$

3

 

(2)-0

(1)

FTRs

Discounted
   cash flow

Market price
   (per MWh)

(3)

 

1

 

0-7

3

 

 

1

 

0-7

3

Electricity

Discounted
   cash flow

Market price
   (per MWh)

(3)

 

1

 

34-129

63

 

 

—

 

—

—

Total
   liabilities

 

 

 

$

5

 

 

 

 

$

4

 

 

 
(1)
Averages weighted by volume.
(2)
Includes basis.
(3)
Represents market prices beyond defined terms for Levels 1 and 2.
(4)
Represents volatilities unrepresented in published markets.
Fair Value, Option, Qualitative Disclosures

Sensitivity of the fair value measurements to changes in the significant unobservable inputs is as follows:

 

Significant Unobservable
Inputs

 

Position

 

Change to Input

 

Impact on Fair Value
Measurement

Market price

 

Buy

 

Increase (decrease)

 

Gain (loss)

Market price

 

Sell

 

Increase (decrease)

 

Loss (gain)

Price volatility

 

Buy

 

Increase (decrease)

 

Gain (loss)

Price volatility

 

Sell

 

Increase (decrease)

 

Loss (gain)
Fair Value, by Balance Sheet Grouping

The following table presents the Companies' assets and liabilities that are measured at fair value on a recurring basis for each hierarchy level, including both current and noncurrent portions:

 

 

Dominion Energy

 

 

Virginia Power

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

(millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

March 31, 2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivatives:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commodity

 

$

—

 

 

$

237

 

 

$

211

 

 

$

448

 

 

$

—

 

 

$

83

 

 

$

59

 

 

$

142

 

Interest rate

 

 

—

 

 

 

748

 

 

 

—

 

 

 

748

 

 

 

—

 

 

 

90

 

 

 

—

 

 

 

90

 

Foreign currency exchange rate

 

 

—

 

 

 

1

 

 

 

—

 

 

 

1

 

 

 

—

 

 

 

1

 

 

 

—

 

 

 

1

 

Investments(1):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S.

 

 

4,052

 

 

 

—

 

 

 

—

 

 

 

4,052

 

 

 

2,155

 

 

 

—

 

 

 

—

 

 

 

2,155

 

Fixed income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate debt instruments

 

 

—

 

 

 

544

 

 

 

—

 

 

 

544

 

 

 

—

 

 

 

329

 

 

 

—

 

 

 

329

 

Government securities

 

 

165

 

 

 

1,137

 

 

 

—

 

 

 

1,302

 

 

 

92

 

 

 

605

 

 

 

—

 

 

 

697

 

Cash equivalents and other

 

 

36

 

 

 

—

 

 

 

—

 

 

 

36

 

 

 

11

 

 

 

—

 

 

 

—

 

 

 

11

 

Total assets

 

$

4,253

 

 

$

2,667

 

 

$

211

 

 

$

7,131

 

 

$

2,258

 

 

$

1,108

 

 

$

59

 

 

$

3,425

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivatives:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commodity

 

$

—

 

 

$

388

 

 

$

5

 

 

$

393

 

 

$

—

 

 

$

177

 

 

$

4

 

 

$

181

 

Interest rate

 

 

—

 

 

 

403

 

 

 

—

 

 

 

403

 

 

 

—

 

 

 

62

 

 

 

—

 

 

 

62

 

Foreign currency exchange rate

 

 

—

 

 

 

93

 

 

 

—

 

 

 

93

 

 

 

—

 

 

 

93

 

 

 

—

 

 

 

93

 

Total liabilities

 

$

—

 

 

$

884

 

 

$

5

 

 

$

889

 

 

$

—

 

 

$

332

 

 

$

4

 

 

$

336

 

December 31, 2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivatives:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commodity

 

$

—

 

 

$

332

 

 

$

437

 

 

$

769

 

 

$

—

 

 

$

32

 

 

$

236

 

 

$

268

 

Interest rate

 

 

—

 

 

 

1,407

 

 

 

—

 

 

 

1,407

 

 

 

—

 

 

 

614

 

 

 

—

 

 

 

614

 

Investments(1):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S.

 

 

3,810

 

 

 

—

 

 

 

—

 

 

 

3,810

 

 

 

2,028

 

 

 

—

 

 

 

—

 

 

 

2,028

 

Fixed income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate debt instruments

 

 

—

 

 

 

576

 

 

 

—

 

 

 

576

 

 

 

—

 

 

 

360

 

 

 

—

 

 

 

360

 

Government securities

 

 

161

 

 

 

1,059

 

 

 

—

 

 

 

1,220

 

 

 

90

 

 

 

542

 

 

 

—

 

 

 

632

 

Total assets

 

$

3,971

 

 

$

3,374

 

 

$

437

 

 

$

7,782

 

 

$

2,118

 

 

$

1,548

 

 

$

236

 

 

$

3,902

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivatives:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commodity

 

$

—

 

 

$

911

 

 

$

15

 

 

$

926

 

 

$

—

 

 

$

333

 

 

$

15

 

 

$

348

 

Interest rate

 

 

—

 

 

 

377

 

 

 

—

 

 

 

377

 

 

 

—

 

 

 

7

 

 

 

—

 

 

 

7

 

Foreign currency exchange rate

 

 

—

 

 

 

101

 

 

 

—

 

 

 

101

 

 

 

—

 

 

 

101

 

 

 

—

 

 

 

101

 

Total liabilities

 

$

—

 

 

$

1,389

 

 

$

15

 

 

$

1,404

 

 

$

—

 

 

$

441

 

 

$

15

 

 

$

456

 

 

(1)
Includes investments held in the nuclear decommissioning trusts and rabbi trusts. Excludes $381 million and $404 million of assets at Dominion Energy, inclusive of $152 million and $161 million at Virginia Power, at March 31, 2023 and December 31, 2022, respectively, measured at fair value using NAV (or its equivalent) as a practical expedient which are not required to be categorized in the fair value hierarchy.
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation

The following table presents the net change in the Companies' assets and liabilities measured at fair value on a recurring basis and included in the Level 3 fair value category:

 

 

 

 

Dominion Energy

 

 

Virginia Power

 

Three Months Ended March 31,

 

2023

 

 

2022

 

 

2023

 

 

2022

 

(millions)

 

 

 

 

 

 

 

 

 

 

 

 

Beginning balance

 

$

422

 

 

$

222

 

 

$

221

 

 

$

102

 

Total realized and unrealized gains (losses):

 

 

 

 

 

 

 

 

 

 

 

 

Included in earnings:

 

 

 

 

 

 

 

 

 

 

 

 

Electric fuel and other energy-related purchases

 

 

(51

)

 

 

48

 

 

 

(52

)

 

 

45

 

Included in regulatory assets/liabilities

 

 

(216

)

 

 

(20

)

 

 

(166

)

 

 

(80

)

Settlements

 

 

35

 

 

 

(48

)

 

 

36

 

 

 

(45

)

Purchases

 

 

16

 

 

 

—

 

 

 

16

 

 

 

—

 

Transfers out of Level 3

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Ending balance

 

$

206

 

 

$

202

 

 

$

55

 

 

$

22

 

Dominion Energy had less than $1 million of unrealized gains and losses included in earnings in the Level 3 fair value category related to assets/liabilities still held at the reporting date for the three months ended March 31, 2023 and no such amounts for the three months ended March 31, 2022. Virginia Power had no such amounts for the three months ended March 31, 2023 and 2022.
Schedule of Carrying Values and Estimated Fair Values of Debt Instruments For the Companies' financial instruments that are not recorded at fair value, the carrying amounts and estimated fair values are as follows:

 

 

 

Dominion Energy

 

 

Virginia Power

 

 

 

Carrying
Amount

 

 

Estimated
Fair
Value(1)

 

 

Carrying
Amount

 

 

Estimated
Fair
Value(1)

 

(millions)

 

 

 

 

 

 

 

 

 

 

 

 

March 31, 2023

 

 

 

 

 

 

 

 

 

 

 

 

Long-term debt(2)

 

$

41,920

 

 

$

39,771

 

 

$

16,400

 

 

$

15,314

 

Supplemental credit facility borrowings

 

 

900

 

 

 

900

 

 

 

 

 

 

 

Junior subordinated notes(2)

 

 

1,387

 

 

 

1,350

 

 

 

 

 

 

 

December 31, 2022

 

 

 

 

 

 

 

 

 

 

 

 

Long-term debt(2)

 

$

39,680

 

 

$

36,426

 

 

$

15,616

 

 

$

14,067

 

Supplemental credit facility borrowings

 

 

450

 

 

 

450

 

 

 

 

 

 

 

Junior subordinated notes(2)

 

 

1,387

 

 

 

1,340

 

 

 

 

 

 

 

 

(1)
Fair value is estimated using market prices, where available, and interest rates currently available for issuance of debt with similar terms and remaining maturities. All fair value measurements are classified as Level 2. The carrying amount of debt issuances with short-term maturities and variable rates refinanced at current market rates is a reasonable estimate of their fair value.
(2)
Carrying amount includes current portions included in securities due within one year and amounts which represent the unamortized debt issuance costs and discount or premium. Additionally, the Dominion Energy carrying amount includes portions classified as held for sale and presented in current liabilities held for sale and noncurrent liabilities held for sale.